May 31, 2020 - Smead Capital Management · Smead Capital Management, Inc. 2777 East Camelback Road...

Semi-Annual Report

May 31, 2020

Investment Adviser

Smead Capital Management, Inc.2777 East Camelback RoadSuite 375Phoenix, AZ 85016

Phone: 877-807-4122www.smeadfunds.com

Beginning in March 2021 for the Fund, as permitted by regulations adopted by the Securities andExchange Commission, paper copies of the reports from the Fund like this one will no longer besent by mail, unless you specifically request paper copies of the reports from the Fund or fromyour financial intermediary, such as a broker-dealer or bank. Instead, the reports will be madeavailable on a website available on the Fund’s website (https://smeadcap.com/smead-value-fund),and you will be notified by mail each time a report is posted and provided with a website link toaccess the report.

If you already elected to receive shareholder reports electronically, you will not be affected by thischange and you need not take any action. If you invest through a financial intermediary, you mayelect to receive shareholder reports and other communications electronically from the Fund bycontacting your financial intermediary (such as a broker-dealer or bank). If you invest directlywith the Fund, you will receive shareholder reports electronically beginning in March 2021.

You may elect to receive all future shareholder reports in paper free of charge. You canrequest to continue receiving paper copies of your shareholder reports by contacting yourfinancial intermediary or, if you invest directly with the Fund, calling 877-807-4122 to let theFund know of your request. Your election to receive shareholder reports in paper will applyto all funds held with the Fund or through your financial intermediary.

Table of Contents

LETTER TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

EXPENSE EXAMPLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

INVESTMENT HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SCHEDULE OF INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

STATEMENT OF ASSETS AND LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 13

STATEMENT OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

STATEMENTS OF CHANGES IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 16

FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

NOTES TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

NOTICE OF PRIVACY POLICY & PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . 31

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Dear Shareholders:

The first half of the fiscal year for the Smead Value Fund (the “Fund”) was all about whatthe COVID-19 virus did to the financial markets, our portfolio and to the recent historicaltrend of growth stock investors substantially outperforming value-oriented investors. TheInvestor Share Class of the Fund (SMVLX) lost 16.51%, while the S&P 500 Index lost2.10% and the Russell 1000 Value Index lost 13.38% for the six months ending May 31,2020. We seek long-term outperformance versus both of these indexes, but are wellaware that it is an ongoing battle.

We are very proud that our Fund ended the decade of the 2010s in the first percentile ofthe Morningstar category (Large Value) as of December 31, of 2019 (out of 690 largevalue funds). As painful as the markets have been in 2020 so far, we believe that thesteep decline in our portfolio and the Russell 1000 Value Index has laid the groundworkfor another great decade to come. Remember, we buy meritorious companies when theyfall deeply out of favor.

Through May 31, 2020, our portfolio acted in sync with the S&P 500 Index with thesupposed COVID-19 misery beneficiaries performing better than economically sensitivestocks. Our best performers were eBay (EBAY), Home Depot (HD) and Credit AcceptanceCorporation (CACC). People stuck at home shopped online or visited essential stores andHome Depot was considered essential. When you were stuck at home and had the ability,you probably fixed and painted a few rooms in your home. Credit Acceptance, a new pickduring the quarter, loans money to car buyers with a checkered credit rating. Millions ofAmericans had their credit rating damaged by COVID-19 quarantines.

On the downside, Saudi Arabia and Russia commenced an oil price war and bludgeoned ourposition in Occidental Petroleum (OXY). We sold and took our loss thinking the tax loss wasmore valuable than the quick rebound possibilities. Macerich (MAC), a real estate investmenttrust, got pummeled by their customers all being forced to close their stores. We remaininvested, because channel checks from states that are opening indicate that their facilities aregetting a good response. Lastly, investors lost all confidence in advertisers using DiscoveryInc. (DISCA) platforms and shows, even though viewership exploded to the upside.

Source: Cypress Capital, “Market Outlook” dated May 29, 2020.

3

Source: Cypress Capital, “Market Outlook” dated May 29, 2020.

The good news for us as long-term investors is that these horrific circumstances and thecrowd of institutional investors buying COVID-19 misery beneficiaries like Facebook,Amazon, Alphabet and Netflix appear to have created a possible pivot point for futureresults. When will these stocks be more popular than when you were imprisoned in yourown home for months and had nothing to do besides interact with them? Simultaneously,when would there be less confidence in businesses which depend on people going outand living their lives?

We have de-emphasized the growthier names in our portfolio and added new nameswhich are normally very reliable industry leaders that investors lost faith in during theCOVID-19 misery. Names like Chevron (CVX), Simon Property Group (SPG) and D.R.Horton (DHI) were purchased during the extreme tribulation of the quarantine restrictions.

Source: Cypress Capital, “The Benjamin Button Bull Market”

4

The chart above shows how much relative performance has been distorted from ahistorical standpoint. This could bode well for a value-based portfolio of companiesselected through our eight criteria that we use to select the Fund’s investments. Thank youfor investing with us and sharing our future optimism for the economy and our portfolio.

Warmest regards,

William SmeadLead Portfolio Manager

Tony Scherrer, CFACo-Portfolio Manager

Cole Smead, CFACo-Portfolio Manager

The information contained herein includes forward-looking statements, such aspredictions, opinions, analyses or outlooks of Smead Capital Management and its portfoliomanagers. These statements are subject to change at any time and are not intended to bea forecast of future events, a guarantee of future results, or investment advice.

Consider the investment objectives, risks, charges and expenses of the Fundcarefully before investing. The statutory and summary prospectuses contain thisand other information about the Fund and is available at www.smeadcap.com or bycalling 877-807-4122. Read carefully before investing.

Performance data quoted represents past performance; past performance does notguarantee future results. The investment return and principal value of aninvestment will fluctuate so that an investor’s shares, when redeemed, may beworth more or less than their original cost. Current performance of the Fund may belower or higher than the performance quoted. Performance data current to the mostrecent month end may be obtained by calling 877-807-4122.

Must be preceded or accompanied by a prospectus.

Mutual fund investing involves risk. Principal loss is possible.

Fund holdings are subject to change at any time and should not be consideredrecommendations to buy or sell any security. Please refer to the Schedule of Investmentsin this report for a complete list of Fund holdings as of the date of this report.

The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is widelyrecognized as representative of the equity market in general. The Russell 1000® ValueIndex measures the performance of those Russell 1000® Index companies with lowerprice-to-book ratios and lower forecasted growth values. Frank Russell Company is thesource and owner of the trademarks, service marks and copyrights related to the RussellIndexes. Russell ® is a trademark of Russell Investment Group. One cannot invest directlyin an index.

The Smead Value Fund is distributed by UMB Distribution Services, LLC. UMBDistribution Services, and Smead Capital Management are not affiliated.

5

SMEAD VALUE FUNDExpense Example(Unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, includingsales charges (loads) on purchase payments and (2) ongoing costs, includingmanagement fees, distribution (12b-1) fees, shareholder servicing fees and other Fundexpenses. This Example is intended to help you understand your ongoing costs (indollars) of investing in the Fund, and to compare these costs with the ongoing costs ofinvesting in other mutual funds. The Example is based on an investment of $1,000invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The second and fourth columns of the following table provides information about actualaccount values and actual expenses of each Class of the Fund. If you purchase Class Ashares of the Fund you will pay a maximum initial sales charge of 5.75% when you invest.Class A shares are also subject to a contingent deferred sales charge of 1.00% forpurchases of $1,000,000 or more that are redeemed within eighteen months of purchasefor Class A shares and redeemed within twelve months of purchase for Class C shares. Inaddition, you will be assessed fees for outgoing wire transfers, returned checks and stoppayment orders at prevailing rates charged by UMB Fund Services, Inc., the Fund’stransfer agent. To the extent the Fund invests in shares of exchange traded funds(“ETFs”) or other investment companies as part of its investment strategy, you willindirectly bear your proportionate share of any fees and expenses charged by theunderlying funds in which the Fund invests in addition to the expenses of the Fund. Actualexpenses of the underlying funds are expected to vary among the various underlyingfunds. These expenses are not included in the Example. The Example includes, but is notlimited to, advisory fees, fund administration and accounting, custody and transfer agentfees. You may use the information in the second and fourth columns, together with theamount you invested, to estimate the expenses that you paid over the period. Simplydivide your account value by $1,000 (for example, an $8,600 account value divided by$1,000 = 8.6), then multiply the result by the applicable number under the column entitled“Actual Expenses Paid During Period” to estimate the expenses you paid on your accountduring this period.

Hypothetical Example for Comparison Purposes

The third and fifth column of the table provides information about hypothetical accountvalues and hypothetical expenses based on the Fund’s actual expense ratio and anassumed rate of return of 5% per year before expenses, which is not the Fund’s actualreturn. The hypothetical account values and expenses may not be used to estimate theactual ending account balance or expenses you paid for the period. You may use thisinformation to compare the ongoing costs of investing in the Fund and other funds. To doso, compare this 5% hypothetical example with the 5% hypothetical examples that appearin the shareholder reports of other funds. Please note that the expenses shown in thetable are meant to highlight your ongoing costs only and do not reflect any transactionalcosts, such as sales charges (loads), redemption fees or exchange fees. Therefore, thethird and fifth columns of the table is useful in comparing ongoing costs only, and will nothelp you determine the relative total costs of owning different funds. In addition, if thesetransactional costs were included, your costs would have been higher.

6

SMEAD VALUE FUNDExpense Example (Continued)(Unaudited)

Class

BeginningAccount

Value12/1/19

ActualEnding

AccountValue

5/31/20

HypotheticalEnding

AccountValue

ActualExpense

PaidDuring

Period(1)

HypotheticalExpenses

Paid DuringPeriod(1)

NetExpense

RatioDuring

Period(2)

Investor Class $1,000.00 $838.50 $1,018.70 $5.79 $6.36 1.26%Class A 1,000.00 835.00 1,018.70 5.78 6.36 1.26Class C(3) 1,000.00 837.50 1,004.02 2.03 9.07 1.80Class I1 1,000.00 836.10 1,020.05 4.54 5.00 0.99Class R1 1,000.00 833.60 1,017.05 7.29 8.02 1.59Class R2 1,000.00 834.20 1,017.80 6.60 7.26 1.44Class Y 1,000.00 836.80 1,020.80 3.86 4.24 0.84

(1) Investor Class, Class A, Class I1, Class R1, Class R2 and Class Y expenses are calculated usingeach Class’ annualized net expense ratio (as disclosed), multiplied by the average account valueover the period, and multiplied by 183/366 (to reflect the most recent one-half year period).Class expenses are calculated using Class’ annualized net expense ratio (as disclosed), multipliedby the average account value over the period, and multiplied by 46/366 (to reflect the actual datesin the period during which the Class C shares were offered)

(2) Annualized.(3) Class C shares commenced operations on April 16, 2020.

7

SMEAD VALUE FUNDInvestment Highlights(Unaudited)

The Fund seeks long-term capital appreciation through concentrated positions. Therefore,the Fund maintains approximately 25-30 companies in its portfolio. The Fund invests inU.S. large capitalization companies through ownership of common stock.

Sector Breakdown(% of Investments as of May 31, 2020)

Consumer Discretionary35.29%

Financials21.68%

Health Care13.55%

Telecommunication Services12.14%

Information Technology6.68%

Industrials3.46% Energy

3.22%Short-Term Investments

3.98%

Continued

8

SMEAD VALUE FUNDInvestment Highlights (Continued)(Unaudited)

Average Annual Total Returns for the period ended May 31, 2020Inception

Date 1 Year 5 Years 10 YearsSince

Inception

Smead Value Fund –Investor Class . . . . . . . . . . . . . . . 1/2/2008 (3.51)% 4.69% 12.07% 6.97%

Smead Value Fund – Class A . . . 1/27/2014 (3.49)% 4.74% N/A 6.76%Smead Value Fund – Class C . . . 4/16/2020 N/A N/A N/A 12.51%Smead Value Fund – Class I1 . . . 12/18/2009 (3.24)% 4.98% 12.36% 11.69%Smead Value Fund – Class R1 . . 11/25/2014 (3.82)% 4.41% N/A 4.85%Smead Value Fund – Class R2 . . 11/25/2014 (3.71)% 5.16% N/A 5.55%Smead Value Fund – Class Y . . . 11/25/2014 (3.12)% 5.13% N/A 5.59%S&P 500® Index (Total Return) . . 12.84% 9.86% 13.15% 8.33%Russell 1000® Value Index(Total Return) . . . . . . . . . . . . . . . (1.64)% 4.36% 9.85% 5.50%

Performance data quoted represents past performance and does not guaranteefuture results. The investment return and principal value of an investment willfluctuate so that an investor’s shares, when redeemed, may be worth more or lessthan their original cost. Current performance of the Fund may be lower or higherthan the performance quoted. Performance data current to the most recent monthend may be obtained by calling 877-807-4122.

Investment performance reflects fee waivers in effect. In the absence of such waivers,total returns would be reduced.

The returns shown assume reinvestment of Fund distributions and do not reflect thededuction of taxes that a shareholder would pay on Fund distributions or the redemption ofFund shares. The following graph illustrates performance of a hypothetical investmentmade in the Fund and broad-based securities indices on the Fund’s inception date. Thegraph does not reflect any future performance.

The S&P 500® Index is a broad based unmanaged index of 500 stocks, which is widelyrecognized as representative of the equity market in general.

Standard & Poor’s®, S&P®, S&P 500® and Standard & Poor’s 500® are trade names ortrademarks of Standard & Poor’s Financial Services, LLC.

The Russell 1000® Value Index measures the performance of those Russell 1000®

companies with lower price-to-book ratios and lower forecasted growth values.

Frank Russell Company is the source and owner of the trademarks, service marks andcopyrights related to the Russell Indexes. Russell® is a trademark of Russell InvestmentGroup.

One cannot invest directly in an index.

Continued

9

SMEAD VALUE FUNDInvestment Highlights (Continued)(Unaudited)

$5,000

$40,000

Russell 1000® Value Index (Total Return)

Smead Value Fund - Investor Class

S&P 500® Index (Total Return)

Growth of $10,000 Investment

5/205/195/185/175/10 5/11 5/12 5/13 5/15 5/165/14

$15,000

$10,000

$20,000

$25,000

$30,000

$35,000$31,245

$25,577

$34,408

Continued

10

SMEAD VALUE FUND

Schedule of Investments

May 31, 2020 (Unaudited)

Shares Value

COMMON STOCKS 95.74%

Banks 11.38%Bank of America Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,641,948 $ 39,603,786JPMorgan Chase & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449,514 43,742,207Wells Fargo & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,110,574 29,396,894

112,742,887

Consumer Durables & Apparel 15.82%Carter’s, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,467 10,005,680DR Horton, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506,186 27,992,086Lennar Corp. – Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898,106 54,299,489NVR, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,035 64,544,956

156,842,211

Consumer Services 0.72%Starbucks Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,071 7,180,617

Diversified Financials 10.25%American Express Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584,916 55,607,964Berkshire Hathaway, Inc. – Class B (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 151,332 28,084,192Credit Acceptance Corp. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,268 17,850,472

101,542,628

Materials 3.21%Chevron Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346,889 31,809,721

Media & Entertainment 12.11%Comcast Corp. – Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835,301 33,077,920Discovery, Inc. – Class A (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,614,132 56,857,371Walt Disney Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256,207 30,053,081

119,988,372

Pharmaceuticals, Biotechnology & Life Sciences 13.51%Amgen, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274,370 63,022,789Merck & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493,367 39,824,584Pfizer, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813,039 31,049,960

133,897,333

Real Estate 3.45%Macerich Co. (The) – REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,330,445 15,870,330Simon Property Group, Inc. – REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316,958 18,288,477

34,158,807

The accompanying notes are an integral part of these financial statements.

11

SMEAD VALUE FUND

Schedule of Investments (Continued)


Shares Value

Retailing 18.64%Booking Holdings, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,304 $ 15,253,164eBay, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974,674 44,386,654Home Depot, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,638 48,363,650Target Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539,548 66,002,907Ulta Beauty, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,056 10,750,104

184,756,479

Semiconductors & Semiconductor Equipment 3.38%Qualcomm, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414,383 33,515,297

Software & Services 3.27%Accenture PLC – Class A (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,729 26,760,821PayPal Holdings, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,753 5,697,083

32,457,904

TOTAL COMMON STOCKS (Cost $788,520,283) . . . . . . . . . . . . . . . . 948,892,256

SHORT-TERM INVESTMENTS 3.97%

Money Market Fund 3.97%State Street Institutional U.S. Government Money Market – PremierClass 0.01% (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,362,895 39,362,895

TOTAL SHORT-TERM INVESTMENTS (Cost $39,362,895) . . . . . . . . 39,362,895

TOTAL INVESTMENTS (Cost $827,883,178) 99.71% . . . . . . . . . . . . . 988,255,151Other Assets in Excess of Liabilities 0.29% . . . . . . . . . . . . . . . . . . . . . . 2,898,167

TOTAL NET ASSETS 100.00% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $991,153,318

(a) Non-income producing security.(b) Foreign issued security.(c) The rate shown is the 1-month performance for the month ended May 31, 2020.

The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusiveproperty of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS® is a service markof MSCI and S&P and has been licensed for use by Smead Capital Management, Inc.


12

SMEAD VALUE FUND

Statement of Assets and Liabilities


AssetsInvestments, at value (cost $827,883,178) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $988,255,151Receivable for Fund shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980,509Dividends and interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,495,926Due from Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,578

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 992,808,164

LiabilitiesPayable for Fund shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449,278Payable to Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599,703Payable to Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,621Payable for distribution fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,932Payable for shareholder servicing fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413,766Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156,546

Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,654,846

Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $991,153,318

Net Assets Consist Of:Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $823,905,715Total distributable earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $167,247,603

Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $991,153,318

Investor Class SharesNet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,770,723Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,852,539

Net asset value, offering price and redemption price per share . . . . . . . . . . . . . . . . . $ 41.44

Class A SharesNet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,044,365Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,164,135

Net asset value, offering price and redemption price per share(1) . . . . . . . . . . . . . . . . $ 41.15

Maximum offering price per share ($41.15/0.9425)(2) . . . . . . . . . . . . . . . . . . . . . . . . . $ 43.66

Class C Shares(3)

Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,061Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664



13

SMEAD VALUE FUND

Statement of Assets and Liabilities (Continued)


Class I1 SharesNet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 788,776,400Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,021,225


Class R1 SharesNet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251,253Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,164


Class R2 SharesNet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,750Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,419


Class Y SharesNet assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,223,766Shares of beneficial interest outstanding (unlimited number of shares authorized,$0.001 par value) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872,490


(1) A contingent deferred sales charge (“CDSC”) of 1.00% may be charged on shares redeemed withineighteen months of purchase for Class A shares and twelve months of purchase for Class Cshares. Redemption price per share is equal to net asset value less any redemption or CDSC fees.

(2) Reflects a maximum sales charge of 5.75%.(3) Class C shares commenced operations on April 16, 2020.


14

SMEAD VALUE FUND

Statement of Operations


Investment IncomeDividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,790,650Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,530

Total Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,936,180

ExpensesManagement fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,310,790Distribution fees – Investor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,348Distribution fees – Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,325Distribution fees – Class C(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Distribution fees – Class R1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925Distribution fees – Class R2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161Shareholder servicing fees – Investor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,836Shareholder servicing fees – Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,941Shareholder servicing fees – Class C(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Shareholder servicing fees – Class I1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688,071Shareholder servicing fees – Class R1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462Shareholder servicing fees – Class R2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Administration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,983Transfer agent fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,720Fund accounting fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,259Federal and state registration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,977Custody fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,508Reports to shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,168Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,598Audit and tax fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,015Trustees’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,984Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,544

Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,077,667Expense Waiver by Adviser (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (142,121)

Net Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,935,546

Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,634

Realized and Unrealized Loss on InvestmentsNet realized loss from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (784,019)Change in net unrealized depreciation on investments . . . . . . . . . . . . . . . . . . . . . . . . . (250,010,109)

Net Realized and Unrealized Loss on Investments . . . . . . . . . . . . . . . . . . . . . . . . . . (250,794,128)

Net Decrease in Net Assets from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(240,793,494)

(1) Class C shares commenced operations on April 16, 2020.


15

SMEAD VALUE FUND

Statements of Changes in Net Assets

Six Months EndedMay 31, 2020(Unaudited)

Year EndedNovember 30, 2019

From OperationsNet investment income . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000,634 $ 11,184,454Net realized gain (loss) from investments . . . . . . . . . . (784,019) 40,806,135Change in net unrealized appreciation (depreciation)on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (250,010,109) 89,889,579

Net increase (decrease) in net assetsfrom operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (240,793,494) 141,880,168

From DistributionsInvestor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,413,101) (8,575,782)Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,510,288) (7,780,661)Class I1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,672,519) (60,404,012)Class I3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (200)Class R1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,007) (50,814)Class R2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,794) (600)Class S(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (199)Class Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (645,464) (892,627)

Net decrease in net assets resulting fromdistributions paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52,258,173) (77,704,895)

From Capital Share TransactionsProceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . 264,177,751 308,757,473Issued in reinvestment of dividendsand distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,228,221 42,244,900

Payments for shares redeemed . . . . . . . . . . . . . . . . . . (329,703,833) (333,178,883)

Net increase (decrease) in net assets from capitalshare transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35,297,861) 17,823,490

Total Increase (Decrease) in Net Assets . . . . . . . . . . . (328,349,528) 81,998,763

Net AssetsBeginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,319,502,846 1,237,504,083

End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 991,153,318 $1,319,502,846

(1) Class I3 shares and Class S shares liquidated at the close of business on March 22, 2019.


16

(This Page Intentionally Left Blank.)

17

SMEAD VALUE FUND

Financial Highlights

May 31, 2020

Income from investment operations Less distributions paid

Net AssetValue,

Beginningof Period

Netinvestmentincome(1)

Net realizedand

unrealizedgain/(loss) oninvestments

Total frominvestmentoperations

Distributionsfrom net

investmentincome


realized gainon

investments

Totaldistributions

paid

Investor ClassSix Months Ended May 31, 2020

(unaudited) $51.55 $0.33 $(8.52) $(8.19) $(0.35) $(1.57) $(1.92)November 30, 2019 49.13 0.33 5.19 5.52 — (3.10) (3.10)November 30, 2018 47.29 0.19 3.75 3.94 (0.10) (2.00) (2.10)November 30, 2017 39.79 0.15 8.57 8.72 (0.19) (1.03) (1.22)November 30, 2016 41.57 0.23 (0.81) (0.58) (0.20) (1.00) (1.20)November 30, 2015 40.98 0.27 2.11 2.38 (0.16) (1.63) (1.79)

Class ASix Months Ended May 31, 2020

(unaudited) 51.20 0.33 (8.45) (8.12) (0.36) (1.57) (1.93)November 30, 2019 48.82 0.33 5.15 5.48 — (3.10) (3.10)November 30, 2018 47.03 0.22 3.72 3.94 (0.15) (2.00) (2.15)November 30, 2017 39.62 0.20 8.50 8.70 (0.26) (1.03) (1.29)November 30, 2016 41.47 0.24 (0.79) (0.55) (0.30) (1.00) (1.30)November 30, 2015 40.95 0.30 2.07 2.37 (0.22) (1.63) (1.85)

Class CSix Months Ended May 31, 2020

(unaudited)(7) 36.22 0.06 4.47 4.53 — — —

Class I1Six Months Ended May 31, 2020

(unaudited) 51.65 0.39 (8.51) (8.12) (0.49) (1.57) (2.06)November 30, 2019 49.10 0.47 5.19 5.66 (0.01) (3.10) (3.11)November 30, 2018 47.33 0.33 3.72 4.05 (0.28) (2.00) (2.28)November 30, 2017 39.87 0.28 8.56 8.84 (0.35) (1.03) (1.38)November 30, 2016 41.66 0.33 (0.79) (0.46) (0.33) (1.00) (1.33)November 30, 2015 41.07 0.39 2.09 2.48 (0.26) (1.63) (1.89)

Class R1Six Months Ended May 31, 2020

(unaudited) 50.46 0.24 (8.37) (8.13) — (1.57) (1.57)November 30, 2019 48.30 0.19 5.07 5.26 — (3.10) (3.10)November 30, 2018 46.57 0.06 3.69 3.75 (0.02) (2.00) (2.02)November 30, 2017 39.33 0.06 8.45 8.51 (0.24) (1.03) (1.27)November 30, 2016 41.31 0.12 (0.81) (0.69) (0.29) (1.00) (1.29)November 30, 2015 40.95 0.35 1.89 2.24 (0.25) (1.63) (1.88)


18

Ratio of expensesto average net assets

Ratio of net investment income(loss) to average net assets

Net AssetValue,End ofPeriod

TotalReturn(2)(3)

Net assetsat end of

period(000’s)

Beforewaivers andrecoupment

of expenses(4)

Afterwaivers andrecoupment

of expenses(4)


of expenses(4)

Afterwaivers andrecoupmentsof expenses(4)

Portfolioturnover

rate(3)

$41.44 (16.51)% $76,771 1.28% 1.26% 1.48% 1.50% 22.34%51.55 12.38% 117,805 1.24% 1.24% 0.71% 0.71% 20.75%49.13 8.65% 136,278 1.24% 1.26% 0.43% 0.41% 10.98%47.29 22.51% 155,602 1.25% 1.23%(5) 0.34% 0.36%(6) 20.04%39.79 (1.34)% 216,244 1.26% 1.26% 0.60% 0.60% 23.67%41.57 6.25% 385,928 1.34% 1.26% 0.61% 0.67% 20.26%

41.15 (16.50)% 89,044 1.28% 1.26% 1.49% 1.51% 22.34%51.20 12.35% 119,181 1.24% 1.24% 0.72% 0.72% 20.75%48.82 8.80% 122,653 1.19% 1.19% 0.47% 0.47% 10.98%47.03 22.51% 163,989 1.18% 1.16%(5) 0.45% 0.46%(6) 20.04%39.62 (1.28)% 152,921 1.22% 1.22% 0.64% 0.64% 23.67%41.47 6.23% 148,500 1.30% 1.26% 0.74% 0.76% 20.26%

40.75 (16.25)% 27 1.90% 1.80% 1.19% 1.29% 22.34%

41.47 (16.39)% 788,776 1.01% 0.99% 1.76% 1.78% 22.34%51.65 12.67% 1,066,128 0.97% 0.97% 1.00% 1.00% 20.75%49.10 8.93% 963,978 0.97% 0.98% 0.72% 0.70% 10.98%47.33 22.86% 897,547 0.98% 0.96%(5) 0.65% 0.67%(6) 20.04%39.87 (1.05)% 736,903 1.00% 0.99% 0.86% 0.87% 23.67%41.66 6.51% 781,146 1.07% 0.99% 0.90% 0.96% 20.26%

40.76 (16.64)% 251 1.60% 1.59% 1.09% 1.10% 22.34%50.46 12.01% 872 1.55% 1.55% 0.43% 0.43% 20.75%48.30 8.47% 792 1.50% 1.50% 0.12% 0.12% 10.98%46.57 22.14% 1,779 1.49% 1.48%(5) 0.13% 0.15%(6) 20.04%39.33 (1.62)% 1,447 1.54% 1.54% 0.33% 0.33% 23.67%41.31 5.91% 553 1.64% 1.59% 0.85% 0.88% 20.26%

19

SMEAD VALUE FUND

Financial Highlights

May 31, 2020

Income from investment operations Less distributions paid

Net AssetValue,

Beginningof Period

Netinvestmentincome(1)

Net realizedand

unrealizedgain/(loss) oninvestments

Total frominvestmentoperations


investmentincome


realized gainon

investments

Totaldistributions

paid

Class R2Six Months Ended May 31, 2020

(unaudited) $52.43 $0.30 $(8.66) $(8.36) $(0.39) $(1.57) $(1.96)November 30, 2019 50.01 0.32 5.20 5.52 — (3.10) (3.10)November 30, 2018 46.73 (0.16) 5.49 5.33 (0.05) (2.00) (2.05)November 30, 2017 39.40 0.08 8.47 8.55 (0.19) (1.03) (1.22)November 30, 2016 41.36 0.16 (0.80) (0.64) (0.32) (1.00) (1.32)November 30, 2015 40.95 0.17 2.13 2.30 (0.26) (1.63) (1.89)

Class YSix Months Ended May 31, 2020

(unaudited) 51.73 0.44 (8.52) (8.08) (0.56) (1.57) (2.13)November 30, 2019 49.19 0.53 5.19 5.72 (0.08) (3.10) (3.18)November 30, 2018 47.40 0.40 3.73 4.13 (0.34) (2.00) (2.34)November 30, 2017 39.92 0.35 8.57 8.92 (0.41) (1.03) (1.44)November 30, 2016 41.70 0.37 (0.78) (0.41) (0.37) (1.00) (1.37)November 30, 2015 41.06 0.42 2.13 2.55 (0.28) (1.63) (1.91)

(1) Based on average shares outstanding.(2) Total return in the above table represents the rate that the investor would have earned or lost on an

investment in the Fund, assuming reinvestment of dividends.(3) Not annualized for periods of less than one year.(4) Annualized for periods of less than one year.(5) Includes a non-recurring reimbursement from service provider. Excluding this non-recurring

reimbursement, the Ratio of expenses to average net assets after waivers and recoupment ofexpenses would have been 1.25%, 1.18%, 0.98%, 1.49%, 1.43% and 0.83%, respectively.

(6) Includes a non-recurring reimbursement from service provider. Excluding this non-recurringreimbursement, the Ratio of net investment income to average net assets after waivers andrecoupment of expenses would have been 0.34%, 0.45%, 0.65%, 0.13%, 0.18% and0.80%,respectively.

(7) Class C shares commenced operations on April 16, 2020.


20

Ratio of expensesto average net assets

Ratio of net investment income(loss) to average net assets

Net AssetValue,End ofPeriod

TotalReturn(2)(3)

Net assetsat end of

period(000’s)


of expenses(4)

Afterwaivers andrecoupment

of expenses(4)


of expenses(4)

Afterwaivers andrecoupmentsof expenses(4)

Portfolioturnover

rate(3)

$42.11 (16.58)% $60 1.47% 1.44% 1.30% 1.32% 22.34%52.43 12.12% 74 1.44% 1.44% 0.66% 0.66% 20.75%50.01 11.88% 10 1.44% 1.49% (0.28)% (0.33)% 10.98%46.73 22.28% 1,263 1.43% 1.41%(5) 0.18% 0.20%(6) 20.04%39.40 (1.51)% 1,841 1.49% 1.44% 0.37% 0.42% 23.67%41.36 6.07% 1,579 1.55% 1.44% 0.35% 0.44% 20.26%

41.52 (16.32)% 36,224 0.88% 0.84% 2.02% 2.06% 22.34%51.73 12.81% 15,443 0.86% 0.84% 1.12% 1.14% 20.75%49.19 9.11% 13,787 0.86% 0.84% 0.84% 0.86% 10.98%47.40 23.04% 12,934 0.83% 0.81%(5) 0.80% 0.82%(6) 20.04%39.92 (0.93)% 10,978 0.88% 0.84% 0.93% 0.97% 23.67%41.70 6.69% 1,192 0.95% 0.84% 0.94% 1.04% 20.26%

21

SMEAD VALUE FUNDNotes to Financial StatementsMay 31, 2020 (Unaudited)

(1) Organization

The Smead Value Fund (the “Fund”) is a non-diversified series of Smead FundsTrust, a Delaware statutory trust (the “Trust”) organized on July 17, 2014. The Trust isregistered under the Investment Company Act of 1940, as amended (the “1940 Act”),as an open-end management investment company. The Fund is an investmentcompany and accordingly follows the investment company accounting and reportingguidance of the Financial Accounting Standards Board (FASB) Accounting StandardCodification Topic 946 Financial Services-Investment Companies. The Fund’sinvestment objective is long-term capital appreciation. The Trust may issue anunlimited number of interests (or shares) of beneficial interest, each with a par valueof $0.001. The Fund currently offers seven classes of shares: Investor Class, Class A,Class C, Class I1, Class R1, Class R2 and Class Y shares. Class I2, Class R3 andClass R4 shares are not yet in operation and thus not currently offered by the Fund.Each class of shares of the Fund has identical rights and privileges except withrespect to the distribution and shareholder servicing fees, and voting rights on mattersaffecting a single class of shares. The classes differ principally in their respectivedistribution and shareholder servicing expenses. Costs incurred by the Fund inconnection with the organization, registration and the initial public offering of shareswere paid by Smead Capital Management, Inc. (the “Adviser”).

(2) Significant Accounting Policies

The following is a summary of significant accounting policies consistently followed bythe Fund in the preparation of the financial statements. These policies are inconformity with generally accepted accounting principles in the United States ofAmerica (“GAAP”).

(a) Investment Valuation

Each security owned by the Fund that is listed on a securities exchange is valued atits last sale price on that exchange on the date as of which assets are valued. Whenthe security is listed on more than one exchange, the Fund will use the price of theexchange that the Fund generally considers to be the principal exchange on whichthe security is traded.

Fund securities listed on The NASDAQ Stock Market, Inc. (“NASDAQ”) will be valuedat the NASDAQ Official Closing Price (“NOCP”), which may not necessarily representthe last sale price. If the NOCP is not available, such securities shall be valued at thelast sale price on the day of valuation. If there has been no sale on such exchange oron NASDAQ on such day, the security is valued at the mean between the most recentbid and asked prices on such day. Over-the-counter securities that are not traded onNASDAQ shall be valued at the most recent trade price.

Debt securities other than short-term instruments are valued at the mean between theclosing bid and asked prices provided by a pricing service (“Pricing Service”). If theclosing bid and ask prices are not readily available, the Pricing Service may providea price determined by a matrix pricing method or other analytical pricing models.Short-term debt securities, such as commercial paper, bankers acceptances and

22

SMEAD VALUE FUNDNotes to Financial Statements (Continued)May 31, 2020 (Unaudited)

U.S. Treasury Bills having a maturity of less than 60 days, are valued at amortizedcost which approximates fair value. If a short-term debt security has a maturity ofgreater than 60 days, it is valued at market price.

Redeemable securities issued by open-end, registered investment companies,including money market funds, are valued at the net asset value (“NAV”) of suchcompanies for purchase and/or redemption orders placed on that day.

When market quotations are not readily available, any security or other asset isvalued at its fair value as determined under fair value pricing procedures approved bythe Trust’s Board of Trustees (the “Board of Trustees”). These fair value pricingprocedures will also be used to price a security when corporate events, events in thesecurities market and/or world events cause the Adviser to believe that a security’slast sale price may not reflect its actual fair market value. The intended effect of usingfair value pricing procedures is to ensure that the Fund is accurately priced.

The Fund’s Valuation Procedures include fair valuation accounting standards thatestablish an authoritative definition of fair value and set out a hierarchy for measuringfair value. These standards require additional disclosures about the various inputsused to develop the measurements of fair value. These inputs are summarized in thethree broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical securities.Level 2—other significant observable inputs (including unadjusted quoted prices

for similar securities, interest rates, prepayment speeds, credit risk,etc.).

Level 3—significant unobservable inputs (including the Fund’s own assumptionsin determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily anindication of the risk associated with investing in those securities. The following tablesummarizes the valuations inputs of the Fund’s investments by each fair valuehierarchy level as of May 31, 2020:

Level 1 Level 2 Level 3 Total

EquityCommon Stocks(1) $948,892,256 $ — $ — $948,892,256

Total Equity 948,892,256 — — 948,892,256Short-Term Investment — 39,362,895 — 39,362,895

Total Investments inSecurities $948,892,256 $39,362,895 $ — $988,255,151

(1) See the Schedule of Investments for industry classification.

No Level 3 securities were held in the Fund at May 31, 2020. For the six month periodended May 31, 2020, there were no transfers between levels for the Fund. It is theFund’s policy to record transfers between levels as of the end of the reporting period.The Fund did not hold financial derivative instruments during the reporting period.

23


(b) Share Valuation

The NAV per share of the Fund is calculated by dividing the sum of the value of thesecurities held by the Fund, plus cash or other assets, minus all liabilities (includingestimated accrued expenses) by the total number of shares outstanding for the Fund,rounded to the nearest cent. The Fund’s shares will not be priced on the days onwhich the New York Stock Exchange is closed for trading.

(c) Use of Estimates

The preparation of financial statements in conformity with GAAP requiresmanagement to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses duringthe reporting period. Actual results could differ from those estimates.

(d) Allocation of Income, Expenses and Gains/Losses

Income, expenses (other than those deemed attributable to a specific share class –distribution and shareholder servicing fees), and gains and losses of the Fund areallocated daily to each class of shares based upon the ratio of net assets representedby each class as a percentage of the net assets of the Fund. Expenses deemeddirectly attributable to a class of shares are recorded by the specific class. Most Fundexpenses are allocated by class based on relative net assets. Rule 12b-1 fees areexpensed at 0.25% of average daily net assets of the Investor Class and Class Ashares, 0.75% of average daily net assets of the Class C shares, and 0.50% of theaverage daily net assets of the Class R1 and Class R2 shares. A separateshareholder servicing fees is authorized up to 0.25% of the average daily net assetsattributable to Class A shares, Class C shares, Investor Class shares, Class I1shares, Class I2 shares, Class A1 shares and Class R2 shares, respectively.However, as of May 31, 2020, those fees were expensed at the following rates:0.17% for the Investor Class shares, 0.17% for Class A shares, 0.25% for Class Cshares, 0.15% for Class I1 shares, 0.25% for Class R1 shares, and 0.10% forClass R2 shares.

(e) Federal Income Taxes

The Fund complies with the requirements of Subchapter M of the Internal RevenueCode of 1986, as amended, necessary to qualify as a regulated investment companyand makes the requisite distributions of income and capital gains to its shareholderssufficient to relieve it from all or substantially all federal income taxes. Therefore, nofederal income tax provision has been provided.

As of and during the year ended November 30, 2019, the Fund did not have a liabilityfor any unrecognized tax benefits. The Fund recognizes interest and penalties, if any,related to unrecognized tax benefits as income tax expense in the statement ofoperations. During the year ended November 30, 2019, the Fund did not incur anyinterest or penalties.

24


As of November 30, 2019, the components of accumulated earnings on a tax basiswere as follows:

Cost basis of investments for federal income tax purposes . . . . . . . . . $908,038,762

Gross tax unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437,637,395Gross tax unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,040,816)

Net tax unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $409,596,579

Undistributed ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,445,849Undistributed long-term capital gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,256,842

Total distributable earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,702,691

Other accumulated losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Total accumulated gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $460,299,270

The tax basis of investments for tax and financial reporting purposes differs principallydue to the deferral of losses on wash sales.

(f) Distributions to Shareholders

The Fund will distribute any net investment income and any net realized long- orshort- term capital gains at least annually. Distributions from net realized gains forbook purposes may include short-term capital gains. All short-term capital gains areincluded in ordinary income for tax purposes. Distributions to shareholders arerecorded on the ex-dividend date. The Fund may also pay a special distribution at theend of the calendar year to comply with federal tax requirements. Income and capitalgains distributions may differ from GAAP, primarily due to timing differences in therecognition of income, gains and losses by the Fund. GAAP requires that certaincomponents of net assets relating to permanent differences be reclassified betweenthe components of net assets. These reclassifications have no effect on net assets ornet asset value per share. For the year ended November, 2019, no permanentadjustments were recorded.

Total DistributableEarnings (Loss) Paid-in Capital

$ — $ —

The tax character of distributions paid during the years ended November 30, 2019and November 30, 2018 was as follows:

November 30, 2019 November 30, 2018

Ordinary income . . . . . . . . . . . . . . . . . . . $ 225,316 $ 6,231,400Long-term capital gain . . . . . . . . . . . . . . $77,479,579 $52,162,084

25


On December 19, 2019, the Fund declared and paid distributions from ordinaryincome and long-term capital gains to shareholders of record on December 18, 2019.

Distributions Paid from TotalDistributions

PaidClassOrdinaryIncome

RealizedGain/Loss

Investor Class . . . . . . . . . . . . . . . . . . . . . . $ 811,397 $ 3,601,703 $ 4,413,100Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844,574 3,665,783 4,510,357Class I1 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,176,548 32,495,971 42,672,519Class R1 . . . . . . . . . . . . . . . . . . . . . . . . . . . — 14,007 14,007Class R2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 558 2,236 2,794Class Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,305 477,159 645,464

(g) Other

Investment transactions are recorded on the trade date. The Fund determines thegain or loss from investment transactions based on specific indentification using thefirst in, first out method. Dividend income, less foreign withholding tax, is recognizedon the ex-dividend date and interest income is recognized on an accrual basis.

(3) Investment Adviser

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Adviserto furnish investment advisory services to the Fund. Under the terms of theAgreement, the Fund compensates the Adviser for its management services at theannual rate of 0.75% of the Fund’s average daily net assets.

The Adviser has contractually agreed to waive its management fee and/or reimbursethe Fund’s other expenses at least through March 31, 2021 to the extent necessary toensure that the Fund’s operating expenses do not exceed 1.26%, 1.26%, 1.84%,0.99%, 1.59%, 1.44% and 0.84% (the “Expense Limitation Cap”) of the Fund’saverage daily net assets for the Investor Class, Class A, Class C, Class I1, Class R1,Class R2 and Class Y shares, respectively. Any such waiver or reimbursement issubject to later adjustment to allow the Adviser to recoup amounts waived orreimbursed to the extent actual fees and expenses for a fiscal period are less than theExpense Limitation Cap in place at the time of waiver; provided, however, that theAdviser shall only be entitled to recoup such amounts over the following three fiscalyears. For the six months ended May 31, 2020, the Adviser waived expenses of$142,121. The following table shows the waived or reimbursed expenses subject topotential recovery expiring on November 30:

Year incurred Expiration Year Smead Value Fund

2017 2020 $ 5242018 2021 2,2352019 2022 2,541

(4) Distribution Plan and Shareholder Servicing Plan

The Fund has adopted a plan pursuant to Rule 12b-1 (the “12b-1 Plan”), whichauthorizes it to pay ALPS Distributors, Inc., the Fund’s principal distributor until

26


June 1, 2020, at which time, UMB Distribution Services, LLC became the Fund’sprincipal distributor (the “Distributor”), a fee at an annual rate of 0.25% of the Fund’saverage daily net assets of Investor Class and Class A shares, 0.75% of the Fund’saverage daily net assets of Class C shares, and 0.50% of the Fund’s average dailynet assets of Class R1 and Class R2 shares for services to prospective Fundshareholders and distribution of Fund shares. During the six months ended May 31,2020, the Fund accrued expenses of $250,774 pursuant to the 12b-1 Plan. As ofMay 31, 2020, the Fund owed the Distributor fees of $33,932.

The Fund has also adopted a shareholder servicing plan (the “Shareholder ServicingPlan”). The Shareholder Servicing Plan also authorizes payment of a shareholderservicing fee to the financial intermediaries and other service providers of up to 0.25%of the average daily net assets attributable to the Class A shares, Class C shares,Investor Class shares, Class I1 shares, Class I2 shares, Class R1 shares andClass R2 shares, respectively (this fee is referred to as the “Shareholder ServicingFee”). However, as of May 31, 2020, these Shareholder Servicing Fees wereexpensed at the following rates: 0.17% for the Investor Class shares of the Fund,0.17% for the Class A shares of the Fund, 0.25% for the Class C shares of the Fund,0.15% for the Class I1 shares of the Fund, 0.25% for the Class R1 shares of theFund, and 0.10% for the Class R2 shares of the Fund. There is no ShareholderServicing Fee for the Class Y shares. For those share classes that currently chargeless than the maximum Shareholder Servicing Fee permitted under the ShareholderServicing Plan, the Fund may increase such fee, but not beyond the maximum of0.25%, only after providing affected shareholders with 30 days’ prior written notice.The following table details the Shareholder Servicing Plan fees paid for the yearended May 31, 2020.

Investor Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,836Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,941Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Class I1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688,071Class R1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462Class R2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

(5) Accounting, Custody, Administration and Transfer Agent Fees

State Street Bank and Trust Company (“State Street”) serves as the Fund’saccounting agent, custodian of the Fund’s investments and administrator of the Fund.For its services, the Fund pays State Street a fee that is calculated daily and paidmonthly at an annual rate based on the aggregate average daily net assets of theFund, along with transactional and out-of-pocket fees.

UMB Fund Services, Inc. (“UMB”) is the Fund’s transfer and dividend disbursingagent. UMB receives a fee that is calculated daily and paid monthly at an annual ratebased on the average daily net assets of the Fund, and is reimbursed for certainout-of-pocket expenses.

27


(6) Capital Share Transactions

Transactions in shares of the Fund were as follows:

For The Six Months EndedMay 31, 2020

For The Year EndedNovember 30, 2019

Shares Amount Shares Amount

Proceeds from shares soldInvestor Class . . . . . . . . . . . . 126,036 $ 5,813,087 291,192 $ 13,813,435Class A . . . . . . . . . . . . . . . . . 387,567 16,958,117 743,884 33,933,212Class C(1) . . . . . . . . . . . . . . . . 664 25,272 — —Class I1 . . . . . . . . . . . . . . . . . 4,673,640 206,330,318 5,637,445 258,925,630Class R1 . . . . . . . . . . . . . . . . 979 45,285 3,043 134,409Class R2 . . . . . . . . . . . . . . . . 103 4,794 1,226 60,414Class Y . . . . . . . . . . . . . . . . . 723,955 35,000,878 41,229 1,890,373

Issued in reinvestment ofdividends anddistributions

Investor Class . . . . . . . . . . . . 81,627 4,087,043 184,024 8,045,556Class A . . . . . . . . . . . . . . . . . 66,300 3,295,870 129,260 5,613,764Class I1 . . . . . . . . . . . . . . . . . 443,985 22,217,030 633,698 27,692,554Class I3(2) . . . . . . . . . . . . . . . . — — 5 200Class S(2) . . . . . . . . . . . . . . . . — — 5 199Class Y . . . . . . . . . . . . . . . . . 12,548 628,278 20,421 892,627

Payments for sharesredeemed

Investor Class . . . . . . . . . . . . (640,558) (25,981,654) (963,854) (44,049,206)Class A . . . . . . . . . . . . . . . . . (617,474) (24,371,576) (1,057,875) (48,140,073)Class I1 . . . . . . . . . . . . . . . . . (6,738,629) (272,897,820) (5,259,898) (238,860,176)Class I3(2) . . . . . . . . . . . . . . . . — — (69) (3,040)Class R1 . . . . . . . . . . . . . . . . (12,092) (540,381) (2,152) (96,172)Class R2 . . . . . . . . . . . . . . . . (104) (4,651) — —Class S(2) . . . . . . . . . . . . . . . . — — (69) (3,032)Class Y . . . . . . . . . . . . . . . . . (162,540) (5,907,751) (43,396) (2,027,184)

Total increase (decrease)in net assets from capitalshare transactions . . . . . . (1,653,993) $ (35,297,861) 358,119 $ 17,823,490

(1) Class C shares commenced operations on April 16, 2020.(2) Class I3 shares and Class S shares liquidated at the close of business on March 22, 2019.

(7) Investment Transactions

The aggregate purchases and sales of securities, excluding short-term investments,for the Fund for the six months ended May 31, 2020 were $248,431,840 and$341,061,290, respectively. There were no purchases or sales of U.S. governmentsecurities for the Fund.

28


(8) Beneficial Ownership

The beneficial ownership, either directly or indirectly, of more than 25% of the votingsecurities of a fund creates a presumption of control of the fund, under Section 2(a)(9)of the 1940 Act. At May 31, 2020, National Financial Services LLC, for the benefit ofits customers, held 50.42% of oustanding shares of the Investor Class. At May 31,2020, Wells Fargo Clearing Services, for the benefit of its customers, held 78.08% ofoustanding shares of Class C. At May 31, 2020, Merrill Lynch Pierce Fenner & Smith,for the benefit of its customers, held 45.20%, 100%, and 100% of outstanding sharesof Class I1, Class R1 and Class R2, respectively.

(9) Principal Risks

General Investment Risks

An investment in the Fund represents an indirect investment in the assets owned bythe Fund. As with any mutual fund, the value of the assets owned by the Fund maymove up or down, and as a result, an investment in the Fund at any point in time maybe worth more or less than the original amount invested.

The Fund’s transactions in listed securities are settled/paid for upon delivery to orfrom their counterparties; therefore, the risk of counterparty default for listed securitiesis considered minimal, as delivery of securities sold is only made once the Fund hasreceived payment. Payment is made on a purchase once the securities have beendelivered by the counterparty. The trade will fail if either party fails to meet itsobligations.

Market and Regulatory Risks

Events in the financial markets and economy may cause volatility and uncertainty andaffect Fund performance. Market events may affect a single issuer, industry, sector,or the market as a whole. In addition, because of interdependencies betweenmarkets, events in one market may adversely impact other markets or issuers inwhich the Fund invests in unforeseen ways. For example, the recent spread of aninfectious respiratory illness caused by a novel strain of coronavirus (known asCOVID-19) has caused volatility, severe market dislocations and liquidity constraintsin many markets, including markets for the securities the Fund holds, and mayadversely affect the Fund’s investments and operations. Traditionally liquidinvestments may experience periods of diminished liquidity. During a generaldownturn in the financial markets, multiple asset classes may decline in value and theFund may lose value, regardless of the individual results of the securities and otherinstruments in which the Fund invests. Governmental and regulatory actions,including tax law changes, may also impair Fund management and have unexpectedor adverse consequences on particular markets, strategies, or investments. Futuremarket or regulatory events may impact the Fund in unforeseen ways, such ascausing the Fund to alter its existing strategies or potentially, to liquidate and close.

Equity Investments Risks

Stock markets are volatile. Equity investments tend to go up or down in value,sometimes rapidly and unpredictably, in response to many factors, including a

29


company’s historical and prospective earnings, the value of its assets, generaleconomic conditions, interest rates, investor perceptions, and market liquidity. Due tothe complexities of markets, events in one market or sector may adversely impactother markets or sectors.

(10) Subsequent Event

The Fund has engaged UMB Distribution Services, LLC to serve as the Fund’sprincipal distributor, effective as of June 1, 2020.

Management has evaluated the possibility of subsequent events through the date ofissuance and determined that there are no additional material events that wouldrequire adjustment to or disclosure in the Fund’s financial statements.

30

SMEAD VALUE FUNDNotice of Privacy Policies and Practices

We collect non-public personal information about you from the following sources:

• information we receive about you on applications or other forms;

• information you give us orally; and

• information about your transactions with us or others.

We do not disclose any non-public personal information about our shareholders or formershareholders without the shareholder’s authorization, except as permitted by law or inresponse to inquiries from governmental authorities. We may share information withaffiliated parties and unaffiliated third parties with whom we have contracts for servicingthe Fund. We will provide unaffiliated third parties with only the information necessary tocarry out their assigned responsibility. All shareholder records will be disposed of inaccordance with applicable law. We maintain physical, electronic and proceduralsafeguards to protect your non-public personal information and require third parties totreat your non-public personal information with the same high degree of confidentiality.

In the event that you hold shares of the Fund through a financial intermediary, including,but not limited to, a broker-dealer, bank or trust company, the privacy policy of yourfinancial intermediary would govern how your non-public personal information would beshared with unaffiliated third parties.

31

SMEAD VALUE FUNDAdditional Information(Unaudited)

Tax Information

For the year ended November 30, 2019, 100% of dividends paid from net ordinary incomequalified for the dividends received deduction available to corporate shareholders.

Statement Regarding Liquidity Risk Management Program

In accordance with Rule 22e-4 under the Investment Company Act of 1940, Smead FundsTrust (the “Trust”) has adopted and implemented a liquidity risk management program (the“Program”). The Program seeks to promote effective liquidity risk management for theSmead Value Fund (the “Fund”) and to protect Fund shareholders from dilution of theirinterests. The Board of Trustees (the “Board”) of the Trust has appointed Smead CapitalManagement, Inc., the Fund’s investment adviser, as the program administrator (the“Program Administrator”). The Program Administrator has further delegated administrationof the Program to the Liquidity Risk Management Committee. The Program Administratoris required to provide an annual report to the Board regarding the adequacy andeffectiveness of the Program and any material changes to the Program.

On April 21, 2020, the Board reviewed the Program Administrator’s annual written reportfor the period May 7, 2019 (adopt of the Program) through March 31, 2020 (the “Report”).The Report provided an assessment of the Fund’s liquidity risk: the risk that a Fund couldnot meet requests to redeem shares issued by the Fund without significant dilution of theremaining investors’ interests in the Fund. The Program assesses liquidity risk under bothnormal and reasonably foreseeable stressed market conditions. The ProgramAdministrator uses an affiliate of State Street Bank, a third party vendor, to provideportfolio investment classification services, and the Report noted that the Fund primarilyheld investments that were classified as highly liquid during the review period. The Reportnoted that the Fund’s portfolio is expected to primarily hold highly liquid investments andthe Fund will be considered a “primarily highly liquid fund” (as defined in the Program) andcan therefore continue to rely on the exclusion in Rule 22e-4 from the requirements todetermine and review a highly liquid investment minimum (“HLIM”) for the Fund and toadopt policies and procedures for responding to a HLIM shortfall. The Report also notedthat the Fund did not hold any illiquid investments and the Trust was not required to fileForm N-LIQUID during the review period. The Report noted that no material changes hadbeen made to the Program since the Board’s last approval of the Program and nochanges were warranted to the Program at such time.

The Program Administrator concluded that the Fund has been able to meet redemptionneeds in all market conditions during the review period without significant dilution to theFund’s remaining investors. The Program Administrator determined that the Program isoperating effectively.

Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnifiedagainst certain liabilities arising out of the performance of their duties to the Fund. Inaddition, in the normal course of business, the Fund enters into contracts that providegeneral indemnifications to other parties. The Fund’s maximum exposure under thesearrangements is unknown as this would involve future claims that may be made against

32

SMEAD VALUE FUNDAdditional Information (Continued)(Unaudited)

the Fund that have not yet occurred. However, the Fund has not had prior claims or lossespursuant to these contracts and expects the risk of loss to be remote.

Information about Trustees

The business and affairs of the Trust are managed under the direction of the Board ofTrustees. Information pertaining to the Trustees of the Trust is set forth below. TheStatement of Additional Information includes additional information about the Trustees andis available, without charge, upon request by calling 877-807-4122.

Name and Age

Position(s)Held withthe Trust

Term ofOffice andLength of

Time Served

Number ofPortfoliosin Trust

Overseenby Trustee

PrincipalOccupation(s)

During the PastFive Years

OtherDirectorships

Held byTrusteeDuring

the PastFive Years

Independent Trustees

Gregory A.Demopulos

Age: 61

Trustee IndefiniteTerm (sinceSeptember2014).

1 Chairman and CEO,Omeros Corp.(biopharmaceuticalcompany) (since 1994).

Director,Onconome,Inc. (2004 to2017).

Peter M. MusserAge: 63


1 Principal, AngelineProperties, LLC (aprivate investment firm)(since 2014); andPrincipal and SeniorEquity Portfolio Managerwith Rainier InvestmentManagement (from 1994to 2013).

Trustee,LawrenceUniversity(since 2012);Trustee, BerryCollege (since2010); andDirector, Boysand GirlsClubs of KingCounty (2008to 2016).

Walter F. WalkerAge: 65


1 Principal, Hana RoadCapital LLC (hedgefund) (since 2007).

AdvisoryCouncil,Stone ArchCapital (since2005); andIndependentDirector, AtlasFinancialHoldings, Inc.(since 2017).

33


Name and Age



Time Served


Overseenby Trustee



OtherDirectorships


the PastFive Years

Nancy A.Zevenbergen

Age: 60


1 Principal and ChiefInvestment Officer,Zevenbergen CapitalInvestments LLC (since1987).

Director,Seattle PacificFoundation(since 1993);Director,AnduinFoundation(since 2010);Director,University ofWashingtonFoster Schoolof Business(since 2014);and Director,evenstar3 Inc.(since 2005).

Interested Trustees and Officers

William W. Smead1

Age: 61TrusteeandChairman

IndefiniteTerm (sinceSeptember2014).

1 Chief Investment Officerof the Adviser (since2007); Chief ExecutiveOfficer of the Adviser(from 2007 to 2019); andPresident and ChiefExecutive Officer of theTrust (from September2014 to January 2016).

None.

Cole W. Smead1

Age: 36Trustee

Presidentand ChiefExecutiveOfficer

IndefiniteTerm (sinceSeptember2014).

Electedannually(sinceJanuary2016).

1 President of the Adviser(since 2020); ManagingDirector of the Adviser(from 2007 to 2019).

Director andChairman,Smead FundsS.A. (since2015).

34


Name and Age



Time Served


Overseenby Trustee



OtherDirectorships


the PastFive Years

Steven J. LeMireAge: 50

ChiefComplianceOfficer

Treasurer,PrincipalFinancialandAccountingOfficer

Electedannually(sinceSeptember2014).

Electedannually(sinceJanuary2016).

N/A Chief Compliance Officerof the Adviser (since2014).

N/A

Matthew K. BrudvikAge: 35

Secretary Electedannually(sinceNovember2017).

N/A Director – US ClientService of the Adviser(since 2018); VicePresident – Sales of theAdviser (from 2013 to2018).

N/A

1 Mr. William Smead and Mr. Cole Smead are each deemed to be an “interested person” of the Fundunder the 1940 Act because of their positions with Smead Capital Management, Inc. Mr. WilliamSmead and Mr. Cole Smead are father and son, respectively.

The Trustees are subject to retirement after the end of the calendar year in which they attain theage of 72.

35

A NOTE ON FORWARD LOOKING STATEMENTS (Unaudited)

Except for historical information contained in this report for the Fund, the mattersdiscussed in this report may constitute forward-looking statements made pursuant to thesafe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Theseinclude any adviser or portfolio manager predictions, assessments, analyses or outlooksfor individual securities, industries, market sectors and/or markets. These statementsinvolve risks and uncertainties. In addition to the general risks described for the Fund inthe current Prospectus, other factors bearing on this report include the accuracy of theAdviser’s or portfolio managers’ forecasts and predictions, and the appropriateness of theinvestment programs designed by the adviser or portfolio managers to implement theirstrategies efficiently and effectively. Any one or more of these factors, as well as otherrisks affecting the securities markets and investment instruments generally, could causethe actual results of the Fund to differ materially as compared to benchmarks associatedwith the Fund.

ADDITIONAL INFORMATION (Unaudited)

The Fund has adopted proxy voting policies and procedures that delegate to the Adviserthe authority to vote proxies. A description of the Fund’s proxy voting policies andprocedures is available without charge, upon request, by calling the Fund toll free at877-807-4122. A description of these policies and procedures is also included in theFund’s Statement of Additional Information, which is available on the SEC’s website athttp://www.sec.gov.

The Fund’s proxy voting record for the most recent 12-month period ended June 30 isavailable without charge, upon request, by calling, toll free, 877-807-4122, or by accessingthe SEC’s website at http://www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first andthird quarters of each fiscal year as an exhibit to its reports on Form N-PORT.Shareholders may view the Fund’s Form N-PORT report on the SEC’s website atwww.sec.gov.

HOUSEHOLDING (Unaudited)

In an effort to decrease costs, the Fund intends to reduce the number of duplicateprospectuses and annual and semi-annual reports you receive by sending only one copyof each to those addresses shared by two or more accounts and to shareholders the Fundreasonably believes are from the same family or household. Once implemented, if youwould like to discontinue householding for your accounts, please call toll-free at877-807-4122 to request individual copies of these documents. Once the Fund receivesnotice to stop householding, the Fund will begin sending individual copies 30 days afterreceiving your request. This policy does not apply to account statements.

(This Page Intentionally Left Blank.)

SMEAD VALUE FUND

Investment Adviser Smead Capital Management, Inc.2777 East Camelback RoadSuite 375Phoenix, AZ 85016

Legal Counsel Godfrey & Kahn, S.C.833 East Michigan StreetSuite 1800Milwaukee, Wisconsin 53202

Independent Registered PublicAccounting Firm

Cohen & Company, Ltd.1350 Euclid AvenueSuite 800Cleveland, Ohio 44115

Custodian, Fund Accountant andFund Administrator

State Street Bank and Trust CompanyOne Lincoln StreetBoston, Massachusetts 02111

Transfer Agent UMB Fund Services, Inc.235 West Galena StreetMilwaukee, WI 53212

Distributor UMB Distribution Services, LLC235 West Galena StreetMilwaukee, WI 53212

This report is intended for shareholders of the Fund and may not be used as salesliterature unless preceded or accompanied by a current prospectus.

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May 31, 2020 - Smead Capital Management · Smead Capital Management, Inc. 2777 East Camelback Road...

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Transcript of May 31, 2020 - Smead Capital Management · Smead Capital Management, Inc. 2777 East Camelback Road...